Co-working Largest Occupier - India’s Office Market Records 43 Mn Sft
Leasing in 9M 2026
- Coworking
overtakes IT/ITeS office space demand with highest 26% overall leasing
share in 9M 2026 followed closely by IT/ITeS with 25% share & BFSI
with 21%
- Net
office leasing across top 7 cities rose 2% YoY – from 42 Mn sq ft in 9M
2025 to 42.9 Mn sq ft in 9M 2026
- GCC
gross office leasing share at record high of 44% in 9M 2026 (40% in same
period last year); IT/ITeS comprised 32%, BFSI with 27%
- Bengaluru
& Hyderabad led net leasing - Bengaluru rose by 20% y-o-y, Hyderabad
saw highest yearly growth of 54% in 9M 2026
- Top
7 cities recorded 5% y-o-y jump in new office completions – from approx.
39.21 Mn sq ft in 9M 2025 to approx. 41.1 Mn sq ft in 9M 2026
- Bengaluru
saw highest new office supply - approx. 12.35 Mn sq ft against 10.41 Mn sq
ft in same period last year - a 19% y-o-y rise; NCR & Pune new office
supply dropped 25% & 36%, respectively
- Office
vacancy dropped to 15.15% in 9M 2026, from 16.20% last year across top 7
cities
- Avg.
monthly office rentals rose 8% - from INR 90 per sq ft in 9M 2025 to INR
97 per sq ft this year; Hyderabad recorded the highest 12% y-o-y rise
Mumbai, 13 October 2026: The Indian office real estate market
recorded a net absorption of 42.9 million sq ft in the first nine months of
2026, up 2% Y-o-Y from 42 million sq ft in the corresponding period of 2025,
finds latest data by Anarock Research & Advisory. Interestingly, occupier
demand composition is witnessing a shift, with the share of coworking and BFSI
growing steadily.
While overall absorption remained stable, coworking and banking,
financial services and insurance (BFSI) increased their share of leasing, with
these two segments accounting for 47% of total office demand in 9M 2026, up
from 41% a year earlier.
|
Net Office Absorption (In Mn Sft) |
|||
|
City |
9M2026 |
9M2025 |
% Change (9M 2026 Vs 9M 2025) |
|
Bangalore |
11.92 |
9.95 |
20% |
|
MMR |
6.65 |
6.6 |
1% |
|
NCR |
7.32 |
8.2 |
-11% |
|
Chennai |
3.56 |
4.5 |
-21% |
|
Hyderabad |
8.8 |
5.7 |
54% |
|
Pune |
3.95 |
6.2 |
-36% |
|
Kolkata |
0.7 |
0.85 |
-18% |
|
Total |
42.9 |
42 |
2% |
Source: Anarock Research & Advisory
Peush Jain, Managing Director - Commercial Leasing & Advisory,
ANAROCK Group, says, "Coworking has overtaken IT/ITeS office space demand - at
26%, it now commands the highest overall leasing share in 9M 2026, followed
closely by IT/ITeS with a 25% share and BFSI with 21%."
New office completions in the top 7 cities increased 5% y-o-y to 41.1
million sq ft in 9M 2026 from 39.21 million sq ft in 9M 2025.
"Bengaluru saw the highest new office supply in this period - about
12.35 Mn sq ft in 9M 2026 against 10.41 Mn sq ft in same period last year,
denoting a 19% y-o-y rise. NCR and Pune new office supply dropped 25% and 36%,
respectively in the period," says Jain.
|
New Office Completion (In Mn Sft) |
|||
|
City |
9M2026 |
9M2025 |
% Change (9M 2026 Vs 9M 2025) |
|
Bangalore |
12.35 |
10.41 |
19% |
|
MMR |
4.1 |
3.4 |
21% |
|
NCR |
5.05 |
6.7 |
-25% |
|
Chennai |
3.8 |
3.5 |
9% |
|
Hyderabad |
9.6 |
5.9 |
63% |
|
Pune |
5.9 |
9.2 |
-36% |
|
Kolkata |
0.3 |
0.1 |
100% |
|
Total |
41.1 |
39.21 |
5% |
Source: Anarock Research & Advisory
While IT/ITeS remains a significant contributor, the broader sectoral
mix is helping diversify demand. Declining vacancy and rising rentals indicate
that office markets continue to attract occupiers, though performance remains
uneven across cities.
Going forward, this momentum's sustainability will depend on continued
leasing activity, the pace of new supply, and how efficiently individual
markets absorb additional office space. While Bengaluru and Hyderabad remain
important growth drivers, the performance of other cities will depend on how
demand keeps pace with available and upcoming supply.
"Interestingly, pan-India office vacancy rate declined by 105 basis
points to 15.15% in 9M 2026 from 16.2% last year, and average office rentals
rose 8% to INR 97 per sq. ft. per month from INR 90," says Peush Jain.
"These trends point to the office market's continuing resilience, even as
demand growth varies across cities and occupier segments."
Coworking & BFSI ramp up their share of office demand
The fact that coworking emerged as the largest occupier segment in 9M
2026 with a 26% share of office demand (from 23% in 9M 2025) is significant -
it highlights the growing importance of flexible workspace formats as
businesses seek greater flexibility in their real estate commitments and
workplace strategies.
With BFSI accounting for a 21% share - a meaningful rise from 18% a year
earlier - reinforces this segment's position as a key source of office demand
alongside technology-led occupiers.
While IT/ITeS accounted for a 25% of total demand, down from 29% in 9M
2025, the sector remained second-best contributor to office leasing.
Manufacturing and industrial occupiers increased their share marginally
to 15% from 14%, while consultancy businesses saw their share fall to 6% from
8%. Ecommerce remained unchanged at 4%, while miscellaneous sectors accounted
for 3%, compared to 4% a year earlier.
Hyderabad & Bengaluru lead absorption growth
Hyderabad and Bengaluru were the strongest growth markets in 9M 2026,
recording increases in both net absorption and new office completions.
- Hyderabad’s
net absorption rose 54% YoY to 8.8 million sq ft in 9M 2026 from 5.7
million sq. ft. a year ago, while new completions increased 63% to 9.6
million sq ft this year from 5.9 million sq ft. The city also recorded the
highest rental growth among the top 7 cities, with average office rentals
rising 12% to INR 77 per sq ft per month. Its vacancy rate declined from
26.5% to 24%, although it remained the highest among the major cities.
- Bengaluru
retained its position as the largest office market by net absorption,
recording 11.92 million sq ft, up 20% from 9.95 million sq ft in 9M 2025.
New completions rose 19% to 12.35 million sq ft. Average rentals increased
9% to INR 109 per sq. ft. per month, while vacancy declined from 12.2% to
11%.
- MMR
recorded largely stable absorption at 6.65 million sq ft, compared with
6.6 million sq ft a year earlier. Completions increased 21% to 4.1 million
sq ft. The market continued to command the highest average rentals at INR
156 per sq ft per month, up 8% Y-o-Y, while vacancy declined from 14.9% to
13.3%.
Absorption moderates in NCR, Pune & Chennai
- NCR recorded net absorption of 7.32
million sq. ft., down 11% y-o-y from 8.2 million sq. ft in 9M 2025. New
completions declined 25% to 5.05 million sq. ft. from 6.7 million sq.
ft. Despite the moderation in leasing activity, average rentals increased
10% to INR 98 per sq. ft. per month. Vacancy fell from 22% to 20.6%,
though NCR continued to have the highest vacancy rate after Hyderabad.
- Pune saw net absorption decline
36% to 3.95 million sq. ft. from 6.2 million sq. ft., while new
completions also fell 36% to 5.9 million sq. ft. Average rentals rose
6% to INR 91 per sq. ft. per month, and vacancy edged down from 11.85% to
11.6%.
- Chennai
saw
absorption decline by 21% to 3.56 million sq. ft., even as new completions
increased 9% to 3.8 million sq. ft. Average rentals rose 6% to INR 83
per sq. ft. per month, while vacancy remained relatively stable at 8.75%,
compared with 8.9% in 9M 2025.
- Kolkata recorded absorption of 0.7
million sq. ft., down 18% YoY, while completions rose to
0.3 million sq. ft from 0.1 million sq. ft. a year ago. Average rentals
increased 6% to INR 66 per sq. ft. per month, and vacancy declined from
17.8% to 16.8%.
Falling Vacancy, Rising Rentals
The pan-India office vacancy rate declined to 15.15% in 9M 2026 from
16.2% a year earlier. All seven cities recorded lower vacancy, indicating an
improvement in overall occupancy conditions despite differences in absorption
and supply additions.
Chennai reported the lowest vacancy at 8.75%, followed by
Bengaluru at 11% and Pune at 11.6%. Hyderabad’s vacancy declined by 250 basis
points to 24%, while NCR recorded a reduction of 140 basis points to 20.6%.
Average office rentals increased across all seven cities. Hyderabad led
with 12% growth, followed by NCR at 10%, Bengaluru at 9% and MMR at 8%.
Chennai, Pune and Kolkata each recorded rental increases of 6%. At INR 156 per
sq. ft. per month, MMR remained the most expensive office market, while Kolkata
recorded the lowest average rental at INR 66 per sq. ft. per month.
|
Office Vacancy (%) |
||
|
City |
9M 2026 |
9M 2025 |
|
Bangalore |
11.00% |
12.20% |
|
MMR |
13.30% |
14.90% |
|
NCR |
20.60% |
22.00% |
|
Chennai |
8.75% |
8.90% |
|
Hyderabad |
24.00% |
26.50% |
|
Pune |
11.60% |
11.85% |
|
Kolkata |
16.80% |
17.80% |
|
PAN India |
15.15% |
16.20% |
Source: Anarock Research & Advisory
“The combination of lower vacancy and higher rentals points to improving
market conditions at the national level. However, the differentiated
performance of individual markets - strong absorption growth in Hyderabad and
Bengaluru and softer activity in NCR, Pune, and Chennai - is notable,”
concludes Jain.
